25 terms

Chapter 9; Nature of Traditional and E-Contracts

Basically a description of Contracts and how they work.

Terms in this set (...)

Function of Traditional and E-Contracts
Allows us to operate with a sense of security
Elements of a Contract
Agreement (mutual assent)- NOT a counter offer.
Consideration (object sought after in a contract, service or promise)
Capacity (every party must be capable and healthy)
Lawful Object (must be legal)
An agreement that is enforceable by a court of law or equity
The party who makes an offer to enter into a contract
The party to whom the offer is made
Defenses to the Enforcement of a Contract
1. Genuineness of Assent (the consent to create a contract must be obtained without duress, undue influence or fraud)
2. Writing and Form (the law requires that certain contracts be in writing or in certain form).
Sources of Contract Law
Common Law
Restatement of the Law of Contracts (1932 American Law Institute made persuasive, yet universally recognized)
Objective Theory of Contracts
The intent to enter into an express or implied-in-fact contract is judged by the reasonable person standard. Would a reasonable person conclude that the parties intended to create a contract after considering (1) the words and conduct of the parties and (2) the circumstances? E.G. no valid contract results from offers that are made in jest, anger, or undue excitement
Common law applies unless statute exists
Bilateral Contract
If the offeror's promise is answered with the offeror's promise of acceptance. A promise for a promise. No act of performance is necessary to create this type of contract. (e.g. Mary says to Peter "If you promise to paint my store by July 1, I will pay you 3,000." Peter says in turn "I promise to do so."
Unilateral Contract
If the offeror's offer can only be accepted by the performance of an act by the offeree. A promise for an act. (e.g. Mary says to Peter "If you paint my shop by July 1st, I will pay you 3000." This offer can be accepted by the painter's performance)
Incomplete or Partial Performance
Once someone starts fulfilling a unilateral contract, the offeror cannot revoke it. (e.g. Alan tells Sherry he will pay her 5000 dollars if she runs the Boston Marathon. He can't take that back once she starts.)
Valid Contract
Meets all the essential elements to establish a contract. (1) It consists of an agreement between the parties (2) is supported by legally sufficient consideration (3) is between parties that with contractual capacity (4) accomplishes a lawful object.
Void Contract
A contract with no legal effect. (e.g. a contract to commit a crime)
Voidable Contract
A contract in which at least one party has the option to avoid his or her contractual obligations.
Unenforceable Contract
A contract where the essential elements to make it are met but there is a problem with the legal side of enforcing it.
Executed Contract
A contract that has been fully performed on both sides.
Executory Contract
A contract that has not been fully performed by both sides, or have been performed by only one side.
Express Contract
A contract that is stated in oral or written words
Implied-in-Fact Contract
Contracts that are implied from the conduct of the parties. They must show that (1) the plaintiff provided property or services to the defendant (2) the plaintiff expected to be paid by the defendant and did not provide the services gratuitously (3) the defendant was given an opportunity to reject the property or services but failed to do so.
Wrench LLC v Taco Bell Corporation
Taco Bell had some guys present their idea of using a chihuahua in their marketing campaign. Taco Bell used their ideas with some other marketing agency. The guys sued for breach of implied-in-fact contract and won 42 million.
Implied-in-Law (Quasi) Contract
Intended to prevent unjust enrichment and unjust detriment, allows a court to award monetary damages to a plaintiff for providing work or services to a defendant even though no actual contract existed between the parties. (e.g. someone in a car accident that is unconscious is liable for the hospital bills)
Powell v. Thompson-Powell
A husband and wife take out a mortgage. The husbands dad ends up having to pay it off, after an oral agreement that the son will pay him back. The couple is divorced and their property is sold to be divided 50% to each person. The ex-wife doesn't want to pay the dad because she wasn't part of that original oral contract. The dad sues and recovers damages because the ex-wife was unjustly enriched.
A doctrine that permits judges to make decisions based on fairness, equality, moral rights and natural law. Resorted to when (1) an award of money damages "at law" would not be the proper remedy or (2) fairness required the application of equitable principles.
Romansata v. Mitton
A landlord leases motels to lessees for 10 years and if they didn't renew the contract within 3 months before the contract expires, they would be evicted and everything they did to the motels would be kept by the landlord. Well, they forgot to renew until 13 days late and so they got evicted. Here we see equitable relief come into play. Since the delay in notice was so short, and the harm to the lessor is slight, the hardship to the lessee is severe, the courts ruled that the contract continue.